How will my retirement savings affect my ability to get financial aid for grad school?

Posted by Retirement Advisor
retirement
chilliemurphy asked:


I have been working for almost 10 years and have been building my 401K since I started right out of college - now, I want to go back to graduate school, but I don’t know if I’ll be able to get any financial aid or favorably-priced student loans if I have retirement assets. Am I required to dip into this money as a first-dollar plan, or can I keep my retirement assets intact & still get financial assistance (even a Stafford loan)? Thanks!

NATALIA
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This entry was posted on Sunday, January 11th, 2009 at 9:10 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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2 Responses to “How will my retirement savings affect my ability to get financial aid for grad school?”

  1. Tracker Says:
    January 13th, 2009 at 4:44 pm

    Retirement accounts are *NOT* considered liquid assets. The definition of a liquid asset is something that you can quickly turn into cash without taking much, if any, loss. If you cash out your 401k or a retirement IRA before you are 59 and 1/2, the government is going to take 40% of it, period.

    This will not affect your ability to get financial aid. Now if you have something like, say a regular savings account with a large amount of money in it, or a money market fund, yeah, that could, if there’s an income limit, prevent you from getting aid. Perhaps you need to contact the financial aid office and/or a broker and ask them about the laws concerning this just to be sure.

  2. roginad Says:
    January 14th, 2009 at 7:58 pm

    Retirement saving is a liquid asset. I would recommend to ask your school financial aid department or call State and Federal Departments to have a certain answer. In any case, keep your retirement assets because the cost (penalties and taxes) for earlier withdraw may be on the level of the assistance you are looking for.